Central Bank Keeps Interest at 6.5%, Points to Cool Inflation Risks

The Central Bank kept the interest rate in its historic floor of 6.5 percent on Wednesday and indicated that the inflation outlook was more benign, despite continuing to see asymmetry in its balance sheet scratch.

“The Committee evaluates that since the last Copom (Monetary Policy Committee), especially regarding the external scenario, there has been cooling of inflationary risks,” the statement said.

In the document, the CB kept the inflation projection for 2019 by the market scenario at 3.9 percent, the same level seen in the December Inflation Quarterly Report. By 2020, the estimate has now risen to 3.8 percent, up from 3.6 percent previously.

In a Reuters poll, all 28 economies interviewed by Reuters already expected the BC to keep its benchmark interest rate unchanged for the seventh consecutive meeting.